India, Inc. went "Wow" when in an snap poll last year, the Murugappas emerged on top, along with MAM Ramaswamy as the wealthiest Chettiar group. The Murugappa group had then scored high with a market cap of Rs 1,000 crore and an estimated wealth of Rs 1,500 crore.
It's now celebration time for the group, as it joins the billionaire club. It proudly declared on Tuesday that it has become the first Chennai corporate as a group to cross the landmark figure of $1bn turnover in '03-04.
Murugappa Corporate Board (MCB) director A Vellayan said, "The year '03-04 proved quite eventful for the group, with its turnover crossing the $1bn mark. It is estimated at Rs 5,266 crore ($1.2bn), recording an impressive growth of 25% over Rs 4,206 crore in '02-03."
He told mediapersons, "What is even more gratifying is that the group clocked a 40% jump in profit before tax last year." While the group companies are in the process of finalising results, Mr Vellayan said the performance is to be viewed against constraints last year with a bad monsoon, cut in fertiliser subsidy, steel price hike and the rupee appreciation.
He said, "We are the first Chennai-based corporate to have crossed, as a group, the $1bn turnover mark". (The TVS Iyengar empire leads the pack with a turnover of $1.5bn, but it is not projected as a group with no common corporate board like the Murugappas).
Last year was quite hectic for the Murugappa group, marked by a series of mergers & acquisitions and divestments. It also became a pan-India group with presence in 12 states in 20 physical locations.
Nearly 40% of the turnover comes from outside Tamil Nadu, Mr Vellayan said. "This year, we will be quite aggressive, aiming to achieve a double digit growth in topline."
The group has a strong presence in farm inputs, engineering and cycles, sugar, abrasives, finance, general insurance, sanitary ware, plantations, bio-products and nutraceuticals.
Mr Vellayan said that in terms of exports, it came to 5% of the turnover. "We are not happy with the performance and want to increase it to 15% within three years," he said.
The group is mainly looking at tapping the US , Europe and South East Asian markets through outsourcing tie-ups, setting up offices and acquiring small companies abroad.
In a statement, Murugappa corporate board chairman PS Pai said it was a great year for the group. "Our '03-04 performance strengthens the platform to pursue the current year with great confidence and achieve strong growth in turnover and profits as a business group."
MCB director Partho S Datta said that this year, the group was set to boost its capital expenditure through various companies. While an investment of Rs 100 crore is envisaged on new projects, another Rs 100-150 crore will be spent on modernisation and de-bottlenecking.
Last year, Mr Vellayan and Mr Datta said the corporate boards functioned more effectively. While MCB met six times, corporate executives board met 12 times.
Working as a team, the boards looked beyond strategies and HR and spent lot of time in discussing customer service, operations and IT.
Asked about brand building, Mr Vellayan said it was studied in length and the group had concluded that it should project Murugappa as an umbrella brand and push individual brands like TI, BSA, Hercules, Chola, Parry's and Parryware. Their identity as part of the group should be increased.
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